What is retail shrink, and how does it differ from theft?

• "Shrink" has come up frequently as retailers like Walmart and Target talk about theft at their stores.
• But shrink is a lot more than theft.
• Shrink accounts for many types of product loss, from milk that goes bad at the store to products stolen by employees.

Executives at retailers like Walmart and Target often mention "shrink" or "shrinkage" when they talk about theft at their stores.

But what, exactly, does that mean?